Real Estate Investments for a Secure Future

Monthly Archives: March 2013

Freddie Mac’s record year of $28.8 billion in new multifamily loans was spread somewhat equally across the country.

Big states took the largest share, including Texas which came to the top of the list with 13.9 percent of new loan transactions. Hot markets like Maryland also scored a big piece of the action, with loan volumes over $2.1 billion for the year.

Meanwhile, some states, such as Montana and Vermont, didn’t see much if any Freddie financing last year.

New York—The economy is doing better—but is the single housing industry as well? Peter Muoio, head of research at Auction.com, talks to MHN about housing demand and his predictions for multifamily.

MHN: Auction.com recently released severalhousing reports. What were some of the findings?

Muoio: We reacted in our blog post to three releases regarding the single-family sector: two were on the price side—the Case Shiller and the FHFA Index—and the other was on new homes sales. Together they painted a similar story to what we had been seeing, and a similar story to what we had been expecting, which is continued recovery for single-family housing. On the price side, what we would suggest is a long, moderate improvement. And that [trend] continued with both the data from the FHFA and Case Shiller for the fourth quarter, confirming very similar movements in previous data for home prices that we had seen from both the National Association of Realtors and from Zillow. On the new home sales front, it was actually quite a jump, which is obviously positive news. We don’t want to get overly excited about the size of that jump because there is a lot of noise in home-sales data—especially in the winter months, because if it happened to have been a warmer month, it could have affected the numbers. Fundamentally it continues to show that we are on the upswing for both demand and existing home prices.

This is all great news, and single-family homes are emerging from its long sleep, but I wouldn’t say that we could claim we’re totally out of the woods. We always hear the argument, “The housing market will help to sustain the economy.” Our point is, the housing market’s reemergence at the beginning of the recovery is a reflection of the economy, and it requires that the economy remain favorable for that recovery of housing to be sustained. In other words, some other economic news that we’ve gotten, like the flat GDP and things of that sort, are troubling. We have to wait for all of the information to see if we are indeed in for a slower few quarters of economic growth. If that were to occur, given that we’ve seen taxes raised on more than three quarters of U.S. households, given that government budget cuts that are now in place and are working their way through the system, there are significant headwinds that are hitting the economy. If those headwinds hurt the labor market, it would be unreasonable to expect that the housing recovery would be unaffected by that—it’s dependent on the economy growing, jobs created, unemployment coming down, incomes growing, confidence improving, etc. The economy is not yet at a point where it’s “full steam ahead,” and it keeps going through these periods of weakness and relative strength, and the housing market is part of that process.

MHN: So you said people say the housing industry helps the economy, but that it’s really the opposite of that.

Muoio: There’s a feed-through effect—if housing is doing better, that is one of the things that then contributes in a positive way to the economy, but that can’t happen in a vacuum. If the rest of the economy is negative or is going backwards, we can’t expect that the housing recovery by itself to reverse that story. In the end, housing demand is going to be determined by the rate of household formations. The rate of household formations, while over long periods of time reflects demographic trends, over short periods of time reflects economic trends. We had a very prolonged period during the recession and in the immediate years of the aftermath of the recession we had very depressed household formations. That changed in late 2011 and early 2012, when we saw a significant pop in household formations when the economy appeared to be gaining momentum, and for us that was one of the two fundamental reasons why the single-family housing market did indeed shift gears into its early stages of recovery. But in late 2012 we saw a slowdown in the pace of household formations again, which did correspond with the latest slowdown in the economy. If that’s the case, what I refer to as “organic demand” for single-family homes begins to dissipate as well.

The other important factor for single-family demand is the homeownership rate. What we did see in 2012 was a less-severe downward slope decline in that homeownership rate, and that’s positive for the single-family market. But if that were also to change for reasons having to do with economic growth, or lack thereof, that would feed through to the underlying demand. The underlying demand for housing doesn’t exist in a vacuum. It really does depend on a supportive macro-economic environment.

MHN: What are your predictions for multifamily? Do you think because the single-family market is doing better, that will lower the multifamily demand? Or do you think that’s going to stay steady?

Muoio: It’s not a total zero-sum game. The demand for multifamily comes from two places, as it does for the single-family market. They can both benefit. If the economy gains momentum and stays on track, then both multifamily demand and single-family demand are generated by the increase in household formations. That’s a win-win for both segments, so they’re not fighting against each other there.

The place where single-family and multifamily are on opposite sides of the coin is in the home-ownership rate. Our expectation has been that we’re closer to the end of the decline in home-ownership rate than we are to the beginning. What that is suggestive of is less of a flow from owned homes to rental properties than what we’ve seen, and that would represent to us a simmering down of that source of demand for multifamily. Taking those two major drivers of demand for multifamily units, we expect multifamily demand to remain positive, we expect multifamily demand to remain healthy, but we do expect it to simmer down from the extremely robust rates of recent years that have been supercharged by the sharp decline in homeownership.

MHN: Do you think baby boomers will continue to downsize to apartments, or will the demand come from millennials?

Muoio: The baby boomer idea is a good point. Those kinds of secular shifting are continuing to occur. As the young adults who have been significantly hurt by unemployment continue to get jobs and that unemployment rate dips down—which it has been—that’s a definite positive for the multifamily sector. Those individuals are almost universally going to go into multifamily units. On the baby boomer side, there is sort of a macro or secular trend towards downsizing. The retirement equation used to be you sell your home in the Northeast or the Midwest and you retire to a home in the Southeast or the Southwest, but this has become a bit more nuanced. Some percentage of the baby boomers now are saying, “I’m going to sell my home and move into a central business district in the area.” So that will continue to be a positive mega-trend for the multifamily industry.

DSD Investor group, Inc. would like to thank MHN for their continued efforts to bring us the best up to date info on the Mutli-Family industry.

Despite construction costs on the rise and financing still not being up to par to what it used to be pre-great recession, real estate is still the soundest investment of today and tomorrow, according to commercial real estate high rollers who spoke at Pension Real Estate Association’s 2013 Spring Conference in Washington, D.C.

“Real estate is a great investment, if you have real estate expectations, it’ll raise returns,” said David Rubenstein, chairman & founder of The Carlyle Group during the earlier part of the first part of the two-day conference taking place March 14-15. “Real estate does not appreciate at 20 percent a year, but if you love to touch and feel the asset and you want something that has some stability to it and you’re happy with the rate return that is realistic, at about 15 percent, I think real estate is universally good to invest in.”

As for which category of commercial real estate is best to put your money in going forward — housing still takes the cake. There is a perceived shortage of housing in the United States today, as no new development has gone up the last couple of years, and yet the population continues to drastically grow, to 315 million in 2013, up by 2.2 million from the year 2010, according to the Census Bureau, which predicts that number to increase to 400 million by 2050.

“Apartments have the lowest lease structure, but also have the lowest cap rates and low cap rates are very important,” said Ken Rosen, chairman of Rosen Consulting Group, a real estate market research firm, and one of the three conference co-chairs, adding that low interest rates are very positive for those struggling to get credit

During the Multi-Family Investment session portion, Mike Kirby, chairman & director of Research at Green Street Advisors agreed that “household formation is perking up,” and job growth numbers are encouraging, adding to the fact that apartment demand will remain strong.

According to panelists, the dream of home ownership has not gone, but simply slowed down, as rent growth has peaked. The average apartment rent increased by 4.1 percent in 2012, and is predicted to increase by 4.6 percent this year, according to National Association of Realtors’ fourth-quarter report.

Ken Rosen brought up the latest Fannie Mae Monthly National Housing Survey, which reflects that “people under the age of 35 don’t have their lives settled yet.” Many of them cannot afford putting down a downpayment on a house or a condo, because generation X and Y are stricken with the burden of student debt.

There is hope yet for the U.S. RE market.

“They don’t think it’s a good investment, they have a dream, but there’s restraint,” Rosen added.

While multi-family investment was the highlight topic during all of the panels, the subject of student and seniors housing was glazed over as well. According to Kirby, student housing has especially been a profitable business, especially for American Campus Communities.

“Lots of people have kids in college and the places they live in are run down, lots of these places are getting replaced,” he added.

Similarly, the senior sector is seen as generating “excellent growth” while supply remains fairly low.

During the Urban Investment session, panelists differentiated between Manhattan and the rest of the world,” only mentioning San Francisco as a possible contender for an urban high yield investment.

“Although society reflects a desire to stay urban … there are few places where urban investment works,” said Jeff Blau, CEO of Related Cos. “The wealth is there, but there’s not enough population, it gets limited quick.”

Panelists gave most credit of their successful urban investments to luck and to Mayor Bloomberg for being development-friendly, overhauling zoning and planning rules to allow New York skyscrapers to soar. Most recently, under Bloomberg’s push, the Department of City Planning proposed a zoning strategy for 78 blocks of the East Midtown office area centered around Grand Central Terminal and generally located between Fifth and Second/Third avenues, and East 57th and East 39th streets with Park Avenue as its center, according to DCP’s website. Despite Bloomberg’s run coming to an end and a New York’s mayoral election around the corner, the real estate moguls remain positive about the future of urban investment.

“There won’t be another mayor like Mr. Bloomberg, but we’re hopeful the next person won’t take us backwards,” said Michael Fascitelli, president & CEO of Vornado Realty Trust, clarifying that he hasn’t officially retired just yet.

While economy and politics were the highlight topics at the conference, and several voiced concerns over investing less during hard times, and appropriately for being in the country’s capital, took pot shots at the government, calling it “an easy target,” the majority remain hopeful about CRE’s future, seeing the country three fourths into recovery mode now, and out of the recession, reflective of the recent spike in job growth, nearly 200,000 jobs were created in February, according to ADP.

“Interestingly that as things as the sequester started getting on the horizon, and all the craziness that goes on down here (referring to Washington, D.C.), the private sector actually picked up the pace,” said Rosen, adding that “the fed will be late to the party, behind the curve, but once they get in, it’ll get done,” referring to government’s role in economic recovery.

The middle class in the developing world will indeed be developing quite rapidly in the next two decades, according to the United Nation’s Human Development Report 2013. The report, this year called “The Rise of the South: Human Progress in a Diverse World,” was released late last week. The UN’s use of “South” in this case refers to developing nations globally, regardless of their precise geographical location. The Human Development Report, released annually by the UN Development Programme, assesses the state of human development on the basis of health, education and income indicators.

The report predicts that by 2025, 1 billion households worldwide will have incomes in excess of $20,000 a year, and about 60 percent of those households will be in what are now termed “developing” countries. By 2030, the global middle class will total 3.2 billion people, compared with 1.8 billion in 1990. Moreover, more than half of the 2030 total will be in the Asia-Pacific region, which represents a major shift from the late 20th century, when Western Europe and the United States had a majority of the world’s middle class, with Japan as the sole Asian nation to have a substantial middle class.

By the end of this decade, the report forecasted that the combined economic output of Brazil, China and India—which are on the leading edge of middle-class growth—will exceed the economic output of the United States, Germany, the U.K., France, Italy and Canada put together. Not only that, formerly poor countries are trading with one another at a faster clip than ever, a trend that’s expected to continue. Trade among developing nations represented less than 10 percent of all global trade in 1980; by 2010, their trade was more than a quarter of the world’s total.

CPI sees February uptick because of gas

The Bureau of Labor Statistics reported on Friday that its Consumer Price Index increased 0.7 percent in February, a sharp increase compared with January, when the CPI was unchanged. Over the last 12 months, however, the index increased only 2 percent, exactly the Fed’s target rate for inflation.

Gasoline was responsible for most of the monthly increase. The gasoline index rose 9.1 percent in February month-over-month to account for almost three-fourths of the overall CPI increase. The indexes for electricity, natural gas, and fuel oil also increased, leading to a 5.4 percent rise in the energy index for the month. The food index increased only slightly in February, rising 0.1 percent.

Take food and energy out of the consumer-price equation—to reveal the “core” rate of inflation—and the increase was only 0.2 percent for the month. Prices for shelter, used cars and trucks, recreation, and medical care all rose in February, but those increases were more than offset by declines for new vehicles, apparel, airline fares and tobacco.

Consumer sentiment slides in February

Though they’re spending more, U.S. consumers were a bit grumpier in March than February. The preliminary Reuters/University of Michigan preliminary consumer sentiment index for March declined from 77.6 in February to 71.8 in January, its lowest level in more than a year.

According to Reuters, about a third of the survey respondents cited federal government economic policies—or rather, the gridlock that’s producing no clear policies—as a factor in their lowered sentiment. Gas prices didn’t help either. Consumers were more pessimistic about both the direction of the economy, as well as their own finances.

Wall Street’s winning streak was at last broken on Friday, though it wasn’t much of a down day. The Dow Jones Industrial Average lost 25.03 points, or 0.17 percent, while the S&P 500 was down 0.16 percent and the Nasdaq declined 0.3 percent.

By David Seeman, Director of Builder Development, Kwikset, Weiser and Baldwin for MultiHousingNews.com

Using extra time, money and resources to complete the dreaded move-out process can be detrimental to an apartment manager’s finances if not handled correctly. Vacancy loss days, maintenance fees and marketing efforts for new residents are just a few expenses that add up during apartment turnaround.

In a time when rentals are on the rise, new technologies, strategic thinking and regular maintenance or renovations can make the turnover process more efficient and cost effective. Every time a lease ends, it shouldn’t have to mean40-plus days of money and time wasted.

Multi-housing boom

Due to the industry’s strong rebound from the recession, developers jumped on the opportunity to increase supply. According to CoStar Group, there was a 66 percent increase in unit construction in the largest 54 metros in 2012, and 2013 will mark the first year since 2009 that the number of new apartment units added to the market will return to historic average levels. However, while there was a steady growth in rentals through 2012, many expect a more moderate growth in 2013.

This boom in multifamily construction is a positive indication and part of the reason why the industry contributed a significant $1.1 trillion to the economy. But the increase in supply also signifies an increase in vacancy rates, which CoStar predicts will trend upward in 32 of the 54 largest metros in 2013. If not handled strategically, each empty unit could end up costing owners significantly. In order to keep expenses and vacancy time down, it’s important to keep the following in mind.

Think upfront

Management and labor costs stemming from re-keying traditional locks are two of the biggest hurdles for apartment managers as residents move out. By implementing available technologies upfront, owners will save costs in the long run. For example, Kwikset’s Key Control Deadbolt allows residents and owners to have one-key access control to all units and maintain key control throughout tenant turnover. This way, managers save the time and money it takes to swap out cylinders or buy and install completely new locks. If a manager were to change 100 locks, he could save an estimated 9.5 minutes and $35 in labor per lock, or 15.8 hours and $3,500 total compared to a traditional pin and tumbler lock.

Plan strategically

Nearly two-thirds of apartment managers increased their staff in 2012 due to high demands. Utilizing their workers efficiently is important when managing turnaround time. By staggering move-out dates throughout the month, landlords can ensure that resources are readily available to get the maintenance jobs finished quickly and effectively. Employing in-house crews instead of third-party workers will help managers save additional time and money.

Minimize turnover rate

The ideal solution to saving money and time from turnarounds is to cut them out completely. Know what renters value in a multifamily home, and ensure they are pleased with what you are offering. If done strategically, renovations end up paying for themselves. Some projects to consider include:

High functioning kitchen and baths

Installing home access control systems to monitor lighting, energy usage and security

Hard surface flooring to ensure less risk of damage

Exterior improvements to the building to maintain structure and appearance

It’s vital to know how to manage resources efficiently during a year when vacancy is likely expected. By employing available technologies and strategies ahead of time, apartment managers can avoid added expenses associated with apartment turnaround.

David Seeman is the director of builder development for Kwikset, Weiser and Baldwin, part of the Spectrum Brand Hardware and Home Improvement Group (HHI).

People often ask me how I became successful in that six-year period of time while many of the people I knew did not. The answer is simple: The things I found to be easy to do, they found to be easy not to do. I found it easy to set the goals that could change my life. They found it easy not to. I found it easy to read the books that could affect my thinking and my ideas. They found that easy not to. I found it easy to attend the classes and the seminars, and to get around other successful people. They said it probably really wouldn’t matter. If I had to sum it up, I would say what I found to be easy to do, they found to be easy not to do. Six years later, I’m a millionaire and they are all still blaming the economy, the government, and company policies, yet they neglected to do the basic, easy things.

In fact, the primary reason most people are not doing as well as they could and should, can be summed up in a single word: neglect.

It is not the lack of money – banks are full of money. It is not the lack of opportunity – America, and much of the free World, continues to offer the most unprecedented and abundant opportunities in the last six thousand years of recorded history. It is not the lack of books – libraries are full of books – and they are free! It is not the schools – the classrooms are full of good teachers. We have plenty of ministers, leaders, counselors and advisors.

Everything we would ever need to become rich and powerful and sophisticated is within our reach. The major reason that so few take advantage of all that we have is simply neglect.

Neglect is like an infection. Left unchecked it will spread throughout our entire system of disciplines and eventually lead to a complete breakdown of a potentially joy-filled and prosperous human life.

Not doing the things we know we should do causes us to feel guilty and guilt leads to an erosion of self-confidence. As our self-confidence diminishes, so does the level of our activity. And as our activity diminishes, our results inevitably decline. And as our results suffer, our attitude begins to weaken. And as our attitude begins the slow shift from positive to negative, our self-confidence diminishes even more… and on and on it goes.

So my suggestion is that when giving the choice of “easy to” and “easy not to” that you do not neglect to do the simple, basic, “easy” but potentially life-changing activities and disciplines.

The Bureau of Labor Statistics’ JOLTS—which always follows closely on the heels of the month employment situation report—said on Tuesday that there were 3.7 million job openings on the last business day of January, little changed from the last business day of December. JOLTS is unusually snappy for a government acronym: Job Openings and Labor Turnover Summary.

However, the number of job openings is up 8 percent year-over-year compared to January 2012. Openings rose in January 2013 in professional and business services, but decreased in health care and social assistance; none of the BLS’ other categories budged much during the month.

The hires rate (3.1 percent) and separations rate (3 percent) also were little changed in January, according to the BLS. But the bureau’s quits rate (a subset of separations) perhaps illustrates the state of the job market better than hires or separation, since quits are voluntary separations initiated by the employee and thus a measure of workers’ willingness or ability to leave jobs. In January, the quits rate was unchanged at 1.6 percent. The quits rate edged up for total private jobs in January, but was unchanged for government jobs.

Gas prices edge down, at last

The weekly U.S. average retail gasoline price (for regular) fell in early March for the first time since mid-December, according to the U.S. Energy Information Agency on Tuesday. The March 11 average was $3.71 per gallon, down $0.07 per gallon from February 25.

Mostly the price of gas has been up in recent months, something that few Americans have failed to notice. The U.S. weekly average (regular) retail gasoline price increased from $3.25 per gallon on Dec. 17, 2012, which was the low for all of 2012, to $3.78 per gallon on Feb. 25, 2013, which was the highest nominal retail price ever during the month of February, according to the EIA.

The EIA expects that lower crude oil prices will result in monthly average regular gasoline prices staying near the February average of $3.67 per gallon over the next few months, with the annual average regular gasoline retail price declining from $3.63 per gallon in 2012 to $3.55 in 2013 and $3.38 in 2014. That would ease some of the energy-price pressure on consumers and perhaps encourage spending on other goods and services. But the agency also notes that energy-price forecasts are highly uncertain and the current values of futures and options contracts suggest that prices could differ significantly from the forecast.

Small business a bit more optimistic

The NFIB reported on Tuesday that its Small Business Optimism Index increased 1.9 points in February to 90.8. That’s an improvement over the last several reports—and may hint that small businesses are a bit more willing to hire than before—but the index remains on par with the 2008 average and below the trough of the 1991-92 and 2001-02 recessions, according to the organization.

Wall Street ended the day on Tuesday mixed, but barely. The Dow Jones Industrial Average gained 2.77 points, or a scant 0.02 percent, while the S&P 500 was down 0.24 percent and the Nasdaq lost 0.39 percent.

New York—In a recent webinar called “Ancillary Income: Enjoy Increased NOI By Helping Residents Set Up Home Services,” hosted by MHN and sponsored by NWP, presenters Chris Finetto of NWP and Jason Scutt of CSI and MyServicesNow demonstrated the benefits of bundling technology packages for residents. According to the presenters, by doing so, it makes it easier on the residents and provides ancillary income for the property managers.

“Moving is a daunting process—even for the folks operating the property,” Finetto said. “It’s a logistical ballet.”

According to Finetto, the challenge for property managers is creating an amenity or a perk for the residents without increasing expenses. However, he warned to do so with caution.

“Selling ancillary services can be a distraction from the leasing process,” Finetto said.

Scutt agreed that selling these services during move-in might be a little daunting. However he felt it was in the best interest of the property manager.

“[When they move in,] residents tend not to have the services they could and end up doing it on their own because it’s not in the lease,” Scutt said. “That’s a missed opportunity for revenue.”

In order to take advantage of the best deals, Scutt recommended studying up on the various companies offered at individual properties, since not all communities in a portfolio would offer the same services.

“Audit your revenue share opportunities,” Scutt said. “Use the audit information to create a baseline for your success at each property.” Another key to success with ancillary services is to make it as simple as possible on the residents. “It has to be easy, or no one is going to want to do it,” Finetto said.

Some of Finetto’s suggestions for offering these services to residents included introducing a concierge-based amenity, issuing a unique toll-free number for each site (which would also make sales tracking easier) and offering online access. Ultimately, these services should be an asset to both the staff and the residents at a property. According to the presenters, there are several benefits of offering bundled technology packages: it’s preferred by residents, it allows for revenue growth at the property, it’s a source of new income potential and it’s liked by the leasing associates.

“Moving is never going to be a fun experience,” Scutt said. “But we can make it a better experience.”

St. Petersburg, Fla.—Bankers Financial Corporation has introduced RentersAmerica, a new security deposit alternative program designed to help multifamily property owners and managers reduce their bad debt, generate ancillary revenue and lease more units. The company, which pioneered the security deposit industry in 1995, developed RentersAmerica as a resident membership association that also benefits residents by dramatically lowering their move-in cash requirements while affording them opportunities to save on a wide variety of products and services through a rewards loyalty program.

For property owners and managers, RentersAmerica:

Reduces bad debt through funds generated from all its residents/members

Increases occupancy and improves resident retention because they can market their communities more aggressively to prospective residents by offering the option to lower their move-in cash requirement

Increases ancillary revenue through marketing fees and excess funds not used to pay move-out debt that remains in their disbursement account

Limits costs associated with the administration of traditional security deposits and collections

Provides exceptional reporting inclusive of detailed or summary information from the community level to the executive level at a moment’s notice

Provides the program without cost to the property or community

For the resident, RentersAmerica:

Reduces the move-in cash requirements as residents pay a nonrefundable membership fee which is much less than the traditional security deposit

Frees up cash which allows residents to use that extra money for other expenses when they need it most

Provides a meaningful rewards program which offers discounts, coupons and special members pricing for goods and services at over 300,000 national and local providers. Used just once or twice a week, earning $1.00-$2.00 in savings at a time can easily offset or exceed the cost of membership.

Incorporating economically and environmentally friendly practices into multifamily living is a great way to avoid unnecessary waste and improve the community. So when an apartment community actually provides a recycling option, why is it being ignored? Information and motivation are keys on the road to greener living. Here are a few great ways that management can encourage their residents to take advantage of these eco-friendly options.

1. Get the Word Out Some renters may not even realize recycling is an option at their apartment community. Management can reach out with information on recycling, pick-up dates and the acceptable recyclables via email, mail or door to door. For an easy reminder of when to recycle, distribute refrigerator magnets with the regular and holiday pick-up times. Showing how the apartment community has been going green (for example, LED light bulbs, high-efficiency air filters, Energy Star products, etc.) shows that you are dedicated to this cause. You can motivate residents into action with eye-catching informative door hangers. For effective visuals, try using an interesting statistic from the Environmental Protection Agency like:

Did you know that recycling 10 aluminum cans saves enough energy to power a laptop for nearly 52 hours?

Enough plastic water bottles are thrown away each year to circle the earth four times!

2. Provide Pick-up Whether it is the morning of pick-up or the day before, you can make recycling even more convenient for your renters by offering door-front or building-front collection. By eliminating the long treks to the recycling station in the rain, cold or heat, residents will be more likely to take advantage of recycling services. Why is fast food popular? Because it’s cheap, quick and easy. Taking that same approach with the recycling process can produce greater results in your community. Many apartment communities already offer “valet trash” services. Implementing a valet recycling option not only encourages renters to reduce their waste production but looks great for potential residents, as well.

3. Provide a Bin If you include the price of a $5 bin in community fees or not, your residents will still need a proper receptacle for their recyclables. A small recycling bin in each apartment will serve as a reminder to keep glass, aluminum and other recyclables out of the trash. This will also cut down on the amount of plastic trash bags that head to the landfills each week. In the same way that people don’t like to buy clothes they won’t wear, they won’t want to clutter their apartment with something they don’t intend to use. Simply having a proper recycling bin available will motivate them to use it.

4. Offer Rewards Apartment communities who partner with businesses such as RecycleBank have a little more to offer their residents. When your residents participate in RecycleBank, they’re earning points and educating themselves with every reusable item they keep out of the trash. More than 1,000 local and national vendors accept these points, coupons and discounts from RecycleBank. Renters can easily earn $20 in savings from eco-friendly stores and brands such as Whole Foods and Kashi. Meanwhile, RecyclePal in Omaha, Neb., took its partnership to the next level by offering doorstep service, with an included 30-gallon recycle bag, for apartments, condominiums and small businesses alike. You can also offer rewards for recycling like discounts on utility bills, rent or even free events hosted by the apartment.

Whether the majority of your residents are students, young professionals, new families or seasoned professionals, they are all strapped for time. Make recycling a fast, simple and pain-free experience for renters and they’re sure to get in the recycling spirit.

Shelley Davenport is a copywriter for Move For Free, an apartment-locating service in Houston, Dallas, San Antonio and Austin. She’s a big fan of apartment decorating and DIY projects.Read more »